In considering the transnational strategy, Nestle evaluates the limits of decentralization. The closer they are to the consumer in activities such as branding and pricing, the more then tend to decentralize. The more they deal with production and logistics, the more they centralize decision-making. The production and logistics decisions involve _______ activities.
A)upstream
B)in its infrastructure
C)downstream
D)midstream

Question

Quizplus · Accepted Answer

Primary activities that are upstream (e.g., logistics and operations), or further away from the customer, tend to be centralized. This is because there is less need for adapting these activities to local markets and the firm can benefit from economies of scale. Additionally, many support activities, such as information systems and procurement, tend to be centralized in order to increase the potential for economies of scale.

In Considering the Transnational Strategy, Nestle Evaluates the Limits of Decentralization